I had the good fortune of spending a few days at the hallowed Wharton Business School recently. I thought I’d share some insights from the experience.
It was interesting to learn how different disciplines (that may appear to be unrelated) can intersect with Business. From basic concepts of forecasting in uncertain environments, to critical hiring, to application of “neuroscience”, each one of them plays a critical role in making effective decisions.
Let me cite a few scenarios that can be converted to Guiding Principles when making strategic decisions:
In today’s competitive world of performance-oriented culture, it’s but natural for leaders to have an ‘Outcome Bias’. However, when diving deep into the ‘logic of chance’, it becomes clear that there is more luck than you typically expect, which of course could work positively or negatively. The point though is rewarding purely on outcomes may not be prudent. The process is also critical and in some cases, long-term outcomes should be rewarded by design.
Hiring in any field (Business, Sports, Education, etc.) is always one of the most strategic activities when building an organization and stronger teams. While companies like Google may have broken new ground when making people decisions, there is still inherent uncertainty. I’m a big fan of sports analogies. When it comes to Rowing, you don’t need to hire the best but “synchrony” is more important, or you may excel with a couple of superstars in Basketball, but in Soccer the key is to improve your weakest players (who by the way are all very good at league or international levels). These learnings can be applied to even IT or Projects, where having exceptional talent in the same team or program may not really work!
What I found useful though is a concept called “Choice Architecture”. Understanding how your customers/consumers think helps you alter the reference point that can in turn change the intended positioning. The Allstate advertisement seems to be a famous and apt example; you are rewarded for no accidents, and even with an accident, you are fine! The lesson that can apply to most industries is “Keep it Simple”, what you see is all there is! It’s fascinating how “Anchoring” against a value or range changes your viewpoint on predictions. There is fivethirtyeight.com, if you are interested in predictions across politics, economics or sports. People are more sensitive to changes than absolute values.
In today’s complex social and dynamic economy, having a strategic mindset is paramount. Here are a few more takeaways that may seem obvious on the face of it but applying them consistently is key:
- Disconnect from the day-to-day to promote innovative thinking (The book Thinking Fast & Slow is a good reference)
- When things go wrong, Effective Apologies can make or break an organization (We’ve seen many situations in the last year from Car makers to Airlines to Apparel).
- There is no substitute for Face-to-Face meetings to promote and strengthen Trust and Cooperation. To extend that further, connections have a positive impact on your social brain network.
- Always have a Devil’s advocate view to hone decision-making in any field.
I would like to take this opportunity to thank the faculty at Wharton for their insights. We interacted with Maurice Schweitzer, Michael Platt, Joe Simmons, Cade Massey, and many others who shared their valuable wisdom and are making a huge difference in shaping the future.